ISLAMABAD: Federal Finance Minister Ishaq Dar has said that the government is taking measures to facilitate business community and increase exports.
He said this while chairing the Monetary and Fiscal Policies Coordination Board meeting. The officials from Commerce Ministry briefed the meeting about imports and exports trends. It was informed that the decline in exports is mostly due to adverse terms of trade triggered by massive reduction in commodity prices and weak global demand.
The minister suggested a committee to work on developing a blue print for the growth and job creation. He also expressed hope that improvement in electricity and gas supply as well as lower policy rate will bring further improvement in productivity and growth.
The Secretary Finance briefed the meeting that headline inflation (CPI) has been contained at 1.86% during first five months of current fiscal year as compared to 6.45% of the corresponding period last year. The current account deficit has been narrowed to $532 million during four months of current fiscal year as compared to $ 1.8 billion in corresponding period last year.
The LSM has witnessed uptick in its growth during first quarter of current fiscal year at 3.9% as compared to 2.6% last year on account of better electricity generation and gas production. The remittances continued its upward growth at 5.2% during first four months of current fiscal year. The foreign direct investment during first quarter increased by 7.7% but in July-October it declined by 24% whereas the foreign public investment increased during the period helped in improving foreign investment by 18.5% over last year. The reserves as on 4th December 2015 were reported at above $ 20 billion.
The FBR tax collection is showing improvement at 16.8% during July-Nov of current fiscal year as compared to last year. It was informed that during November FBR collections were remained higher at 27%. The fiscal deficit has been contained at 1.6% as compared to 1.7% last year. The meeting noted that improvement was observed in most of the public debt sustainability indicators during last two fiscal years.
The SBP briefed the meeting about the money supply. It informed the meeting that NFA has increased by Rs.105 billion. The NDA however, declined by Rs.65 billion during July 01-Nov 20, FY 16, mainly due to the decline in other assets scheduled banks. Higher SBP-NDA along with higher SBP-NFA subsequently increased the reserve money by Rs.462 billion during Jul 01-Nov 20, FY16; compared with an increase of Rs.176 billion in corresponding period last year. Credit to private sector witnessed increase of Rs.40 billion during Jul 01-Nov 20, FY16; compared with an increase of Rs.58 billion in corresponding period last year. Encouragingly, fixed investments continued to expand in Q1-FY16 for the fourth consecutive quarter since Q2-FY15. Moreover, the impact of easy monetary policy (since November 2014) has started to reflect in the weighted average lending rates on fresh and outstanding loans. With current credit cycle entering in uptake phase borrowing on account of both working capital and fixed investment is likely to increase.
The meeting was attended by the Secretary Finance, senior officers of Finance Division, SBP Deputy Governor, representatives of Ministry of Commerce, IBA Director Dr Ishrat Hussain and PIDE Vice Chancellor Dr Asad Zaman.
